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The bad-news bulls are back! Every newly uncovered scandal, every morsel of hideous fraud, every fresh revelation of bank mischief and regulatory lapse that normally would make investors' stomachs churn instead seem to conspire to embolden them to buy equities.

We're talking here about the same investors who it feels like only yesterday were horrified at the notion of sticking so much as a toe in the market, all but paralyzed by the wounds inflicted by the Great Recession and its progenitor, the financial crisis. Suddenly, they've begun to act with an urgency that bespeaks an uncontrollable and a virtually inexplicable compulsion to get in at the top of what for all the world looks like a cyclical rally.

Understand, we're not Mr. Prim: There's nothing wrong in trying to play the ups so long as you keep in mind that you're in the market for a quick fling at a time when interest rates are at record lows, decent yields on stocks are something of an oxymoron, and much of the globe is mired in recession or threatened to be engulfed by one.

The economic news here at home is at best a very mixed bag, with more recent particulars flirting with the outright negative. For weeks now we've been dutifully whistling past the graveyard as that menacing fiscal cliff draws nearer by the day, and so, alas, does the hair-raising possibility of plunging over it.

But even as the recovery weakens and its already labored gait slows further, the market pushes higher, undeterred by shortage of breadth and by a heavy sprinkling of losses among rank-and-file stocks. One obvious reason for its quixotic behavior is the growing belief Mr. Bernanke will wave his magic wand and bring forth QE3, giving the faltering economy a proper lift. Ah, were it so easy.

The problem with such much-to-be desired remedial action is that the effect of this stimulus appears to diminish with every repetition. And, despite Ben's calm reassurance offered once more last week to the foolish fiddlers on Capitol Hill that he will act when necessity calls for action, the suspicion mounts that the Fed may have just about used up its store of monetary tricks to rouse the recovery from its somnolence.

Another more demonstrable virtue that investors have latched on to by way of justification for their urge to buy is the sterling performance of corporate earnings and the expectation that it will endure come what may. No argument that profits have held up remarkably well. But anticipation, whetted by analysts' projections for this year and next that earnings will continue to do so, ignores the sorry truth that margins are no longer so easy to fatten up by cutting staff, since there's not all that much staff left to cut.

And, in any case, those bullish estimates make scant allowance for a stalled economy, let alone something much worse if, indeed, come Jan. 1, everything except lawmakers' perks and paychecks are slashed to bits and pieces.

Friday's flaccid market may have been merely traders lightening up before the weekend. But it also might have been the result of the Street sobering up in the aftermath of its odd, brief buying binge. If so, to state the obvious (something we excel at), investors had best gird themselves for an uncomfortable summer.

OUR APOLOGIES TO CEDAR RAPIDS. In last week's musings on the profusion of Ponzi schemes, focusing on the most recent addition to the investment hall of shame -- the Peregrine Financial Group, a commodities-brokerage firm known to its familiars as PFGBest, whose founder and main man, Russell Wasendorf Sr., confessed to having spent something north of $200 million of customers' funds over the course of nearly two decades -- we were guilty of a silly aqueous error in describing PFGBest's Iowa location: It is Cedar Falls—not Cedar Rapids, a town we remembered fondly from our college days.

A brief update: Russell Wasendorf Sr., who supposedly but unsuccessfully tried to commit suicide when his embezzlement scheme that started back in 1993 finally came apart, was arrested and criminally charged on July 13 with lying to regulators. He allegedly intended to leave the bulk of his estate to his new wife, whom he had secretly married a few weeks before.

According to The Wall Street Journal, the authorities involved in the investigation are by no means certain that his signed statement as to where the missing customer funds went is necessarily true. A little skepticism is always welcome, even if it comes nearly two decades late.

Peregrine is in liquidation. All of which, we're sorry to say, rather strongly suggests that customers ought not to count on getting their dough back anytime soon, or perhaps ever.

IN HER LATEST MACROMAVENS EPISTLE, Stephanie Pomboy remains steadfastly bearish. Her spicy prose and undiluted feistiness make for lively reading -- a trait that most market commentary is woefully shy on.

And even when you disagree with her take on the economy and the markets, her insights are invariably rewarding. Lucky reader, you don't have to take our word for it, just flip to Barron's Interview, "A Failing Fiat System," and see for yourself.

In her recent letters she spotlights a subject that's by no means gone unnoticed but Stephanie's sharp treatment illuminates the plight in this yield-parched global economy of pension funds of every description. All by themselves, the numbers of underfunding of U.S. plans are startling: an estimated $400 billion on the corporate side and a whopping $4 trillion of state and local governments.

Trying to narrow the gap would call for cash contributions or renegotiation/abrogation of pension pledges. Either way, Stephanie observes, would exert a material drag on a droopy economy. Funneling more corporate cash would divert money from productive purposes. Reconfiguring the contracts would mean municipal and state governments would have to slash spending or raise taxes and force the working stiffs to bear the burden.

If the shortfalls weren't already bad enough, Stephanie postulates that they are destined to expand rather than contract as earnings growth across the board decelerates in a stagnating economy. Pity the poor pension manager struggling to generate a respectable return, a daunting and dangerous feat these days. He's also, she contends, whether he's fully aware of it or not, going to have to deal with the coming bust of the junk-bond bubble.

And Stephanie's nothing if not adamant that the junk portion of the bond market meets "all the standard criteria of a bubble." She cites, by way of illustration, the fact that junk yields are now "hovering around the all-time lows notched in 2005 -- the absolute peak in the greatest asset bubble and credit-financed expansion of our lifetimes.''

Further evidence of the junk-bond bubble if you harbor any doubts on that score is that, according to the EPFR Global, in the first quarter of this year investors put a hefty $33 billion into high-yield bond funds -- four times as much as they bought in all of 2011. In the past three years, assets of junk bond funds have more than doubled.

And when the bubble bursts, as Stephanie believes it inexorably will, among the likely big losers are Jane and John Q. who saw junk as a way to possibly recoup some of their vicious real-estate and stock-market losses, and insurance companies, the biggest holders of corporate debt and the largest counterparties in the derivatives market.

And pension funds are front and center on the endangered list, having, as Stephanie notes, "loaded the boat with junk in a desperate attempt to meet 8%-plus return assumptions in a 1.5% risk-free world."

In the end, she concludes mournfully, whether the agency is a meaner tax bite or corporate and government reneging in some fashion or another on pension promises, "households will increasingly be forced to pick up the retirement funding slack.''

To translate from the bureaucratic lingo, "household," means ordinary folks like you and us.

Another instance of the American Dream transmuting into the American Nightmare?

WE MET BARTON BIGGS, DECADES AGO, when we first came to Barron's and Barton was a fledgling securities analyst at E. F. Hutton. Barton still had visions of becoming one of those exalted beings -- an Author -- while we contented ourselves with modest dreams of producing the Great American Novel. Somehow we both got sidetracked, although Barton never really lost his yen or remarkable gift for writing, somehow adding literary luster and wit to subjects -- escription of markets, companies and the like -- traditionally devoid of either.

Barton served on the Barron's Roundtable early on and he was an absolute delight to listen to, with a marvelous if understated -- or maybe especially marvelous because it was understated -- ability to parry and thrust in those unscripted but always engaging exchanges that make the discussions so distinctive and enjoyable.

A natural storyteller, Barton loved stories and invariably when we broke bread over the years, he had somebody in tow who had a Wall Street story to tell just coincidentally about the next great stock, which the guy just happened to own and, out of the goodness of his heart thought Barton ought to own also. In response, Barton would smile that non-committal smile of his and dig into his salad, rarely evincing the skepticism he typically felt.

We found him unfailingly generous in sharing information and opinions, unperturbed in confessing mistakes and shy about proclaiming his successes. He was a great friend and simply a splendid person, a man of true quality. We'll miss him for sure, and Wall Street will be much the poorer for his absence.